Sri Lanka’s Central Bank reduces mandated forex sales by banks to 15%

The Monetary Board of the Central Bank of Sri Lanka has decided to reduce mandatory sale of export proceeds/receipts and inward workers’ remittances of commercial banks with effect from February 27, 2023.

Accordingly, commercial banks will now have to sell only 15 percent of such proceeds / receipts weekly to the Central Bank, down from 25 percent, which was in effect from December, 2021.

The Central Bank said the move was aimed at encouraging market-driven foreign exchange activities in the domestic forex market.

The new operating instructions are applicable on converted inward workers’ remittances, converted services sector export proceeds / receipts and the residual value of mandatorily converted export proceeds of goods.